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BREAKING: Dell to Acquire EMC for $67B

October 12, 2015
by Rajiv Leventhal
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In what’s being called the biggest technology deal of all time, Dell Inc. and private-equity firm Silver Lake have announced that they will buy Hopkinton, Mass.-based cloud computing vendor EMC Corp. for $67 billion in cash and stock.

Under the terms of the agreement, EMC shareholders will receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in VMware. Reports say that EMC owns approximately 80 percent of VMware which is valued at $26.4 billion. Based on the estimated number of EMC shares outstanding at the close of the transaction, EMC shareholders would receive a total combined consideration of $33.15 per EMC share and the total transaction would be valued at approximately $67 billion, the companies said.

The combination of Dell and EMC will create the world’s largest privately-controlled, integrated technology company, the two companies said in a joint announcement released on Oct. 12. The announcement reads, “The transaction combines two of the world’s greatest technology franchises with leadership positions in servers, storage, virtualization and PCs and it brings together strong capabilities in the fastest growing areas of the industry, including digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security.”

Two years ago, Dell officially became a private company in a $25 billion deal. Ever since, its founder and CEO, Michael S. Dell, and Silver Lake, its financial backer, have focused on diversifying from the personal computer market, which Dell has been long known for. Following completion of the transaction, Mr. Dell will lead the combined company as chairman and CEO.

“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment. Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” Mr. Dell said in a statement. “Our investments in R&D and innovation along with our privately-controlled structure will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes. I am incredibly excited to partner with the EMC, VMware, Pivotal, VCE, RSA and Virtustream teams and am personally committed to the success of our new company, our customers and partners.”

Meanwhile, Joe Tucci, chairman and CEO at EMC, said “I’m tremendously proud of everything we’ve built at EMC – from humble beginnings as a Boston-based startup to a global, world-class technology company with an unyielding dedication to our customers. But the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era. I truly believe that the combination of EMC and Dell will prove to be a winning combination for our customers, employees, partners and shareholders.”

In the 2015 Healthcare Informatics 100, a list that ranks the 100 vendors with the highest revenues derived from healthcare IT (HIT) products and services earned in the U.S. from the previous year, Dell came in fourth with a reported HIT revenue of $2.9 billion, while EMC came in with an estimated revenue of $925 million.

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